Price Cap: What is it and what does it mean for me?

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You may be aware that Ofgem, the energy regulator, introduced a price cap on standard variable and default tariffs on the 1st January 2019. We thought we’d try to help you understand why by explaining what this means and answer the most common questions being asked by our customers.

What is the default tariff price cap ?

The default tariff price cap limits the amount that energy suppliers can charge per kWH of electricity and gas. This only affects customers on default or standard variable tariffs, with an estimated 11 million customers projected to save around £76 per year*. A default tariff is one that you haven’t actively chosen which you may be on if, for instance, you have just moved into a new property or you have come to the end of a fixed rate tariff and haven’t selected a new tariff. Any fixed rate tariff that you have actively chosen is unlikely to be protected by the cap.

Why introduce a price cap?

Ofgem introduced the price cap because they were concerned that those customers who did not actively switch from a standard variable or default tariff, were not being charged a fair rate for their energy. Suppliers are required to ensure rates for these tariffs are in line with or below the default cap rates, so that customers are not paying more than they should.

The price cap for standard or default tariffs has been set at £1,137 a year for the typical dual fuel customer paying by Direct Debit. If you choose to pay upon receipt of your bill, the cap is higher at £1,221 a year to cover additional service costs. So, you’re likely to save a bit more if you pay by Direct Debit. These are typical rates based on average usage, if your usage is higher than average your energy costs could be higher than the cap limits shown above.

The cap limits will change in April and October each year to match the changing costs of supplying gas and electricity and we’ll contact you in advance of any change to the cap rates.

What do I need to do?

We contacted all our customers affected in December to let them know that the price cap was coming. The good news is that you don’t need to do anything; we have moved all our standard variable tariffs in line with the price cap, so you have the peace of mind knowing that you are paying a fair price for your energy. If you’re looking for a bit more certainty, it’s worth considering a fixed rate tariff which will fix your energy price for a period of time.

Will I definitely save money?

The cap ensures that you’ll always pay a fair price for your energy. As mentioned before, the price cap won’t necessarily limit your total bill; this will fluctuate based on how much gas and electricity you use. The capped price you’ll pay is reliant on several things, including the type of meter you have, where you live (there are different caps based upon the cost of transporting the energy across the country to where you live), and how you pay for your energy (standard credit or Direct Debit). Paying by Direct Debit is our cheapest and easiest way to pay; find out if you could save money by checking out our website here:

If you have any more questions on the price cap and what it means for you, check out Ofgem’s website:


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